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Perspectives | Supporter Spotlight

How to convert Millennial and Gen Z TikTok users into readers

Although TikTok is widely considered a “Gen Z platform,” the video-sharing app also boasts an extremely high number of Millennial users. With over 100M active users in the U.S. alone, 32% of TikTok’s global users are between the ages of 25-34. With such a large and diverse audience – not to mention the recent revelation that young people are even turning to TikTok as a search engine over Google – there is a unique opportunity for digital publishers to adapt their strategies on the platform to reach critical audiences at scale effectively.

To do so, media companies must consider how best to leverage the viewing trends and the receptiveness these generations have to certain types of media. Below are key insights into how Gen Z and Millennial demographic similarities and differences fit into the larger social landscape, what influences their decision-making when it comes to attention, and ultimately what success looks like for digital publishers on the platform.

Where to find Gen Z and Millennial social media users

The rise of TikTok has significantly shifted the way people consume media. In fact, when surveyed about which sources of digital media they use the most, 37% of Gen Zers revealed TikTok takes up most of their time. While Millennials still skew a bit more towards Facebook (39%) and Instagram (19%), there is still a sizable audience of Millennials on TikTok. Nevertheless, as the preference for engaging short-form content continues to grow in popularity with Gen Z and Millennials, other social platforms are beginning to take note.

With so much buzz around TikTok’s growing user base and platform layout, it’s no surprise that Instagram introduced Reels. And, with 42% of Gen Zers sharing they also use Reels, it’s clear that this demographic jumps at the chance to create and consume short-form content no matter the platform. This insight gives publishers the perfect opportunity to maximize viewership of their short-form content. They can post virtually the same video to several platforms which means that they can cast an even wider net with little to no additional effort.

What’s influential in TikTok users’ decision-making

Though more social media platforms are mimicking TikTok’s strategies, 40% of Gen Z and 32% of Millennial users find advertisements on TikTok to be the most creative and authentic versus other social platforms. And two-thirds of users research products after seeing them on TikTok. This points to the platform’s power in helping to build brand awareness and influence purchase decisions.

This provides a unique opportunity for publishers to capitalize on especially when it comes to branded content. Last year, Buzzfeed signed a first-of-its-kind deal with TikTok, signaling the beginning of media companies leveraging the platform to create innovative deals between publishers and brands. This allows brands to capitalize on a built-in audience and allows publishers to attract new audiences – brand loyalists – to their content.

Branded hashtag challenges are one of many great tactics to attract engagement by enlisting consumers to become active participants in brand campaigns via user-generated content. So, empowering platform users to join campaigns by submitting their own content is the type of word-of-mouth marketing advertisers crave and built for the digital age. Using creative means to get information across results in a higher chance of user recollection and can help to increase follower count (for both publishers and brands), and eventually – readers.

Strategies for digital publishers to try ASAP

There are a few breakout media brands whose success on social platforms like TikTok provides insight into how digital publishers can best approach converting Gen Z and Millennial social media users into subscribers and promote consumer loyalty.

The Washington Post successfully uses TikTok to reach a younger audience and break away from its more traditional, serious tone. Morning Brew, the media company that aims to help professionals of all ages, began to use TikTok to help grow its newsletter subscriber count. The publication partnered with a creator to create authentic TikTok videos while also promoting the Morning Brew message. This enabled Morning Brew to expand its social media footprint as well as gain thousands of quality, engaged newsletter subscribers.

Digital media publishers have an opportunity to extend their reach by using social media platforms focused on short-form video content. Ultimately, TikTok truly allows for and incentivizes creativity that both Gen Zers and Millennials heavily respond to. Digital publishers can use a variety of features and trends to create effective, immersive, and interactive content to reach their target audiences with unprecedented efficiency. Authentically reaching consumers through TikTok will help media properties gather accurate data on consumer interest as well as humanize humanize the company by providing digestible content in a more relatable and accessible way.

Featured Post | Innovation

At The Texas Tribune, audiences expect service from social audio

Social audio creates opportunities to grow and engage with audiences. It also provides an ideal medium for tackling big issues. However, The Texas Tribune’s social audio experience reminds us about the importance of concentrating on key issues that affect the everyday lives of audiences.

Austin-based Texas Tribune keeps a tight focus on specific issues, events, and questions when using social audio. “Our approach to live social audio is to ensure that we’re talking about a topic or a storyline,” rather than a project or its journalistic process according to Bobby Blanchard, Director of Audience, who oversees Texas Tribune’s social channels.

Topical discussions

The Tribune has found that there are topics that resonate with their audiences and keep them more engaged over others, Blanchard says. “We generally lean towards service work — how to vote, to understand and follow elections, how to prepare for possible power grid problems. These conversations attract a wide variety of readers because they’re all impacted by what’s discussed,” he says.

For example, The Tribune held a Twitter Space on preparing for the winter in December 2021, which discussed how and why Texans should prepare for the winter ahead. The conversation centered around the power grid and safety, and it featured the president of the Austin EMS Association.

The following month, The Tribune held a Twitter Space on redistricting and voting coverage. The discussion focused on what citizens should know about voting in Texas in 2022, what redistricting is and how it affects the election, and what would be on the ballot. The event featured former Tribune executive editor Ross Ramsay and Alexa Ura, demographics and voting rights reporter of The Texas Tribune.

“The Texas Tribune helps its readers navigate and understand how Texas policy and politics impacts their day-to-day lives,” says Blanchard. “Answering reader questions and engaging with our audience is a key part of our service journalism work.”

In addition to providing critical information, social audio does help The Tribune build community by giving the audience the chance to engage directly with the reporters behind the news they read. However, their emphasis remains on using the new platform to provide readers with what they expect from the brand.

As Blanchard points out, people consume information in all kinds of ways — some via text, some via visual and some via audio. “I think giving our readers multiple ways to consume the news helps us serve all types of readers. I also think it strengthens our relationship with them. It helps our readers understand that, like them, we’re humans doing this work.”

Preparing to go live

While Twitter Spaces and other social audio platforms gives anyone the option to go live, it’s not something The Texas Tribune does on impulse. A lot of planning and logistics goes into preparing for an event and they leverage lessons they’ve learned over time.

The Tribune has a thorough process to be prepared before going live on social audio. Blanchard says that, prior to going live, they give everyone a chance to test their tech and make sure they’re in a space with a good connection and have the equipment they need to record good audio. Blanchard and his team prefer wired headphones to wireless headphones, for example.

“We always have a preference for actual microphones or wired headphones to Bluetooth or built-in laptop microphones. It ensures a higher level of audio, in our experience,” Blanchard says. “We’ve just found the audio quality is better and there is a lower chance of technical problems with the audio when you use wired headphones as opposed to wireless. Best to remove as many chances for things to go wrong as possible.”

It is critical to ensure that the moderator is prepared and set up with everything they will need. “We write an introductory script for the moderator and prep questions ahead of time, just in case we get very few audience questions,” Blanchard says. “We pepper in a lot of reminders for the moderator to do a fresh table setting of what the conversation is about midway through, so folks who join late can easily catch up. We try to limit these conversations to 15-30 minutes.”

Blanchard noted they don’t open the mic to everyone. If listeners want to ask questions, they have to tweet at or direct message The Tribune. From a moderation standpoint, Blanchard says letting just anyone speak can become a minefield. If anyone can join the conversation, it opens up the possibility to trolls or bad faith actors trying to attack journalists or guests. “We don’t want that to happen — it spoils the conversation. There’s also enough of that online as it is. There’s no need to make space for anymore of it.”

As for timing their social audio events, the Tribune tries to schedule them when people are most likely to tune in, which is typically lunch time, according to Blanchard. Time of day affects how engaging a conversation is and how many people tune in. “If you do a live audio conversation at 4:45 PM, when everyone is driving home, you’re not likely to get a ton of listeners.”

“It’s my working theory that people enjoy listening during lunch,” he says. “I’ve also seen newsrooms have success with this in the early morning or late evening. I consider 1-5 PM a bit of a dead zone, and typically avoid programming live conversations then.”

Monetize like a sponsored event

Beyond audience engagement and a new storytelling platform, media organizations can look to social audio as a potential new revenue source. The Tribune does not generally have sponsors for its social audio events. However, in some cases they’ve used social audio for what would have traditionally been a live event. As such, they secured a sponsor as they would for those events otherwise.

“Our conversation about our primary preview coverage on March 1, 2022 — for example — was sponsored by The Marchant Good Government Fund and Raise Your Hand Texas,” Blanchard says. However, he notes that “financial support plays no role in picking topics or guests for these conversations — or any of our journalism.” And, because The Texas Tribune is a not-for-profit organization, sponsorship is not a significant driver behind its social strategy. However, other organizations seeking to build a revenue stream on social audio might emulate the live-event model as one approach.

Certainly, monetization opportunities seem promising. However, social audio falls into a class of its own. It isn’t as neat and tidy as podcasts. Its immediacy and intimacy is one major differentiating factor, and it still seems to be space in which content companies are experimenting.

Takeaways

While Millennials might be digital natives, Gen Z are social natives, having grown up watching video and listening to audio instead of visiting traditional news sites, according to the Reuters Institute’s Digital News Report 2022.

Thus, it seems likely that social audio will play an increasing role in their consumption habits, given Gen Z’s heavy reliance on social platforms. Digital content companies need to keep an eye on the changing needs and wants of this next generation, as they exhibit different behaviors than those who came before.

However, when conceiving a social audio strategy, it’s critical to think about what audiences need, and expect, from your brand. Priority number one is to figure out how social audio uniquely serves an audience and what you’re trying to accomplish. For this brand, having a narrow focus on service-based journalism works best.

At The Texas Tribune, social audio offers immediate engagement with audiences and the opportunity to provide useful, practice advice and trusted guidance, and address its readers’ needs in a moment. Their experience demonstrates how social audio can be used to help audiences make decisions, on what to buy, how to do something, answer specific questions, and solve their problems.

Featured Post | Innovation

How social audio supports The Washington Post’s “adoption, addiction, and affection” strategy

In the 18 months since social audio spaces were introduced the media landscape, digital content companies have experimented to uncover their purpose and how they can best serve audiences. For The Washington Post, the answer was revealed amid the discussion of a massive leak of offshore data, which exposed the secrets, deals, and assets of the world’s rich and powerful.

The Pandora Papers investigation was not The Post’s first use of social audio. They’d experimented with Clubhouse in mid-May 2021 and held their first Twitter Spaces event June 10, 2021.

It was, however, one of their most ambitious experiments as it involved other global news organizations simultaneously joining the Twitter Spaces event. The Pandora Papers investigation spanned five continents and involved 600 journalists in 117 countries.

“The Pandora Papers was the largest reporting consortium in journalism history. We’re talking about [journalists examining] 11.9 million documents and financial records,” said Michelle Jaconi, head of news talent strategy and development at The Washington Post.

That’s a wealth of information – but a challenge to present given its scope and depth. “The amount of nuance that you can go into in a platform in audio where you don’t have the set limitations of an article is wonderful.”

“Twitter Spaces has been an incredible playground for creativity and exploring ways where we could stretch that platform,” Jaconi said. “That one was one of the biggest and most ambitious spaces we’ve done, because we did it across different newsrooms. It was an incredibly fascinating test and stretch, and incredibly well received.”

Space(s) for transparency and engagement

Social audio allows The Post to share the teamwork and collaboration that takes place in their newsroom, Jaconi explained. The work that goes into a large scale, investigative report is largely invisible to readers. However, the audio format allows the journalists to communicate the process and passion that goes into a project like this one. As Jaconi points out, “The voices humanize the work, effort, the passion and the care that goes into every piece of journalism at The Post.”

One thing the team at The Post has learned through its use of social audio is that the audience is incredibly curious and wants to learn more about the journalistic process.

“We learned, wow, there is an audience for this, and [social audio] is incredibly good for things that are so complex that you need extra time and nuance and care to explain,” Jaconi said. “And, especially with Pandora Papers, we were testing the platform and how much we could stretch the production capabilities of an audio event that was truly global. We had some issues. But I think Twitter’s even gotten better since then at the product and the production aspect of doing massive events.”

Attracting and engaging audiences

Like all publications, Jaconi says The Washington Post not only wants to increase the size of its audience, but also engage younger, next generation, diverse and global audiences. For the use of Twitter Spaces grew the following of @washingtonpost on Twitter, as well as the following of their reporters.

“I think one of the things that social audio is incredible for is that social platforms convene audiences of curious people – or sometimes just bored people who become curious when they see a trending hashtag,” Jaconi said. “Every time we do one of these spaces, our reporters get new followers. That shows that we’re building audience.”

Social audio spaces create an intimate connection between The Post and their audience, on a device that many use to interact with their family and friends. “That is a wonderful way for us to not tell our expertise, but instead to show it. We do it in a way that provides intimate connection between our reporters and their audience,” Jaconi said.

For reporters who often work in text-based mediums, one of the things that makes social audio fun is that they get to know their audiences more personally and engage directly. 

“While you’re talking, you can actually see avatars and photos of people joining in that conversation right there with you. And that is something that I love for reporters to know,” Jaconi said. “Who doesn’t like telling a story and looking at the avatar of someone and saying, ‘oh, thank you for listening. That’s so interesting that you’re popping into this conversation and listening to me.’ That has been really rewarding for everyone who’s participating.”

And, as it continues to improve the functionality of Spaces, Twitter is now surfacing live audio to users when they first log in and providing beacons to audiences indiscriminately. This adds value for digital content companies because previously, Twitter had only surfaced Spaces to an organization’s existing audience.

“Social audio is one of the most exciting playgrounds right now to gather new audiences because the product keeps getting better,” Jaconi said.

Adoption, addiction, affection

In helping Post reporters reach new audiences, Jaconi looks for a funnel of adoption, addiction, and affection. With The Post’s recent reporting on the war in Ukraine, Jaconi said they are seeing an uptick in followers, but also affection. Social audio plays into this by increasing the personal engagement between audience and reporters.

In particular, The Post has sees a trend of audience members sending deeply moving messages. “People have been following reporters for the first time and posting comments like: ‘I am praying for your safety. I hope you’re okay. Please be all right.’ That is affection and concern for our journalists,” Jaconi said, noting that she’s never seen this kind of thing take place at this scale before.

“To have that be the overwhelming chat response to an audio space from our reporters covering the war, boy, is that a different experience for our journalists and reporters,” Jaconi said. “It means that we we’ve done a really good job and reaching people who are interested in information and are interested in building that relationship with us and our reporters.”

Lessons learned

Jaconi explained that there are a few best practices in the social audio space that digital content companies ought to think about.

First, update your Twitter app. Jaconi explained that Twitter often updates Twitter Spaces and improves and fine tunes its functionality. (We covered some of those in our last social audio piece.)

Second, remember that audience members can join Twitter Spaces mid-stream. It’s possible those audience members have never met you before. Hosts should make a habit of re-introducing themselves during the course of an event. This should include addressing new people joining the Space and telling them what they’re speaking about, their name, background, expertise, and the topic of discussion.

“It doesn’t have to be boiler plate. It can be done in a casual way. But also, because there’s audiences that are listening while they’re multitasking, I really urge people to introduce themselves again,” Jaconi said.

Thirdly, Jaconi suggested that digital content companies who engage in social audio spaces ought to “feed their audience.” This means give your social audio space a thread of everything you covered in that space. If you’re using social audio to discuss investigations, mention the methodology of your investigation, the complexity of doing the investigation, biographies of speakers or guests and the like, in a thread. This assures that the listening experience isn’t just a one-off that happened in the Twitterverse, and instead is and can be connected to other content, events, or used in the future.

“It is so rare, and so exceptionally powerful, to be in the same place as your audience at the same time, with everybody convened,” Jaconi said. “You’re convening the curious at something that you’re an expert in. So feed them when they’re there, because it might be a while before you convene them again.”

Industry-Research

Publishers’ video focus among major shifts for 2022

Instagram is hot but YouTube is not. Publishers around the world are shifting focus this year, according to a recent survey of 30 publishers from 17 countries. The Publishing Trends Report 2022 by Echobox offers insight into publisher’s evolving priorities as they move out of pandemic crisis mode into the new normal.

Respondents indicated that they are most focused on increasing web traffic, utilizing new content formats, and embracing automation. They also share a keen interest in capturing the attention of the all-important youth demographic.

The survey included participants from the following countries: Argentina, Bulgaria, Ecuador, France, Germany, Greece, Italy, Japan, Latvia, Mexico, Poland, Portugal, Romania, Singapore, United Kingdom, United States, and Uruguay. This year, the authors of the report concentrated on data received from decision-makers and social media specialists. News outlets comprised over 50% of the sample.

Publishers’ top priorities for 2022:

  • Increase traffic (73%)
  • Grow social media followers & engagement (57%)
  • Improve quality of published content (50%)

The release of free digital information during the pandemic led to a surge in traffic for online publishers, which – perhaps paradoxically – lead to more paid subscribers. The resulting increase in digital subscriptions even helped offset the longtime decline of print subscriptions. Respondents’ strong interest in increasing web traffic reflects reduced reliance on print revenue, while publishers continue to hone an ideal balance between paywalled and unrestricted content.

Which activities are most important to publishers in 2022?

  • Video content 63%
  • New social media platforms 43%
  • Newsletters 43%
  • Finding new audiences 40%

Authors of the study link the appeal of video to declining costs of production, the popularity of short-form content across social media platforms, and video’s effectiveness in engaging audiences.

Although only 43% of respondents listed newsletters as a top priority in 2022, 64% of respondents indicated plans to either start producing newsletters, or increase the number of newsletters they offer. This reflects the focus on turning general web traffic into subscribers.

The most important platforms for publishers in 2022 are:

  • Instagram 83%
  • Facebook 37%
  • Twitter 23%
  • TikTok 20%
  • LinkedIn 13%
  • YouTube 3%

The surge of publishers’ interest in Instagram also points to their desire to expand their audience in the 18-24 range, as they look to the future.  Pew Research Center data indicates that 76% of 18–24-year-olds use Instagram, and it remains among the most downloaded apps. Another draw is that Instagram is less publisher-saturated than Facebook.

Why the lukewarm interest in TikTok if younger audiences are so crucial? Survey authors attribute this to the relative newness of the platform. They found that publishers have not had time to refine their strategy to generate traffic via TikTok. Also, fewer young people use TikTok for news content than Instagram, which makes the platform less of a priority for news organizations.

A big change between the 2021 and 2022 survey results was declining interest in YouTube. In 2021, 52% of respondents believed YouTube to be of increased importance. However, in 2022 that percentage fell to just 3%. This would seem to contradict publisher’s strong stated interest in video this year. However, authors suggest that the drop may be due to publishers tailoring video content towards Instagram and other platforms which require formats and dimensions that don’t transfer easily to YouTube. Those interested in producing longer, larger format videos may be using third party vendors or in-house production, bypassing YouTube.

While Instagram is attracting a surge of attention from publishers in 2022, due in part to being less saturated with publisher content than Facebook, Facebook remains a mainstay platform for publishers. In 2021, 40% of publishers surveyed by Echobox stated that “staying ahead of Facebook algorithm changes” was a priority. This points to publishers’ awareness of the continued importance of Facebook referral traffic.

The growing Importance of AI

  • 74% consider AI important or very important in 2022
  • 67% believe AI will be more significant to their organization in 2022 than in 2021
  • Use and implementation of AI is increasing in emerging markets, not just large-scale publishers
  • Emerging markets are focusing AI efforts on automation of paywalls and subscriptions

In the 2021 survey, 1 in 3 companies cited lack of time as a major concern. The potential for AI to alleviate pressure and free up time can help publishers focus on a top priority cited in 2022 survey results: creating quality content.

Industry-Research | Research

Algorithmic image recognition and “what’s important”

Facebook, Instagram, and Twitter use algorithmic processing for image analysis and sharing. The platforms try to understand the content of these images, and they algorithmically detect the persons and objects within these images at the pixel level. Benjamin N. Jacobsen’s research, Regimes of recognition on algorithmic media, examines how algorithmic media shapes and controls how people see the social world. He defines the concept of regimes of recognition as the algorithmic tools, techniques, and practices that social media platform use to decide recognizability within their platforms. 

The platforms use algorithms to crop images to generate engaging content. Applicable to Jacobsen’s research, the algorithm systems learn to detect and weight certain features in images rather than others. In other words, the algorithms actively generate what is recognized. He agrees with researcher Louise Amoore, who believes social platforms decide what images are interesting and recognizable. Amoore states, “they actively generate recognizability as such so that they decide what or who is recognizable as a target of interest in an occluded landscape.”

Twitter’s detection algorithm

In September 2020, consumers complained that Twitter’s image-cropping algorithm favored white faces over black faces. One example showed that the algorithms consistently cropped out images of former president Barack Obama. Experiments with stock photo models, cartoon characters, and even white and black dogs resulted in similar detection biases. Eventually, Twitter’s chief design officer, Dantley Davis, agreed there was a racial bias in the algorithm. He added, “the algorithm is not explicitly racist since it does not make its decision based on particular faces but rather on the contrasts that are calculated from the pixel values of the image.”

According to Twitter engineers Lucas Theis and Zehan Wang, the company first used facial recognition to auto-crop images. However, it often awkwardly cropped faces not centered within the picture. Twitter then moved to use deep saliency prediction networks to find the “most interesting part” of the image. Saliency maps use predefined areas of images to evaluate the pixel contrasts between different image regions. These data-trained neural networks and other algorithms find and then crop around the most engaging area of the image. Unfortunately, as the algorithms decide what is uploaded, they also determine what is nonrecognizable and set conditions for who is visible on the platform.

Deciding recognizability

The algorithm disregards socio-cultural contents and context in its processing of images. Regimes of recognition can easily make certain people non recognizable — focusing on specific features of an image and ignoring others. Algorithmic media platforms produce rules for what is visible and what is not visible.

Jacobsen questions the shaping, organizing, and automating parameters of cropping images. He sees decisions of inclusion and exclusion as a fundamental political question. Saliency detection algorithms rest on the assumption that some things deserve attention and others do not. Further, Twitter’s role in cropping people’s images (algorithmically) decides what elements in images are redundant. This begs a larger question as to why social media platforms need to edit people’s uploaded images at all?

Social media platforms algorithmically shape and organize people’s factors of attention. Twitter offers a prime example of the algorithmic processes in how it cropped out out black faces because it did not recognize the image. This sends a signal that that what is non-recognizable is unimportant. Further research is needed to examine the role (and potential biases) of algorithmic cropping, techniques, and results of these tools on other social platforms.

Industry-Research

Which platforms are “best” for spreading conspiracy theories?

Conspiracy theories have a long history in society, and social platforms offer a fresh new breeding ground for them. Yannis Theocharis, Ana Cardenal, and Soyeon Jin examine which social platforms effectively propagate fake news and conspiracy theories. Their study, Does the platform matter? examines the relationship between social media platforms and the spread of Covid-19 conspiracy theories. The analysis focuses on Facebook Messenger, WhatsApp, YouTube, Twitter, and Facebook, in a two-wave study across 17 countries.

Symmetrical or asymmetrical followership

The research correlates the spread of conspiracy theories to the construct of a communication environment. In other words, it looks at the structural features of followers within each platform. The authors classify a structural design as either symmetrical or asymmetrical followership.

Symmetrical followership environments imply that information is shared with friends and not with strangers. The primary use of this type of platform, like Facebook, is for socialization and entertainment; people predominantly follow people they already know. People see a symmetrical way of connecting as safe and in a comfortable environment — they know the connection points well. Facebook, Messenger, and WhatsApp connections are socially homogeneous.

An asymmetric follower structure runs on weaker social connections, and it’s a follower-based platform where most exchanges between users occur publicly. Twitter is an example of an asymmetric social platform. It is more heterogeneous, mixing in political views and information knowledge.

Interestingly, YouTube’s follower structure is primarily tied to people’s interests and not based on close social connections. Like Twitter, YouTube has an asymmetrical follower structure. Recommendations, including algorithmic ones, create new connections. YouTube’s design also encourages content generators to build audiences and promote themselves. This asymmetrical follower design makes it easy for YouTubers to share content around fringe ideas with their followers.

Research hypotheses and analysis

The researchers developed four hypotheses to test:

  1. There is a negative relationship between using Twitter for news and holding conspiracy beliefs about Covid-19.
  2. There is a positive relationship between using Facebook for news and holding conspiracy beliefs about Covid-19.
  3. There is a positive relationship between using YouTube for news and holding conspiracy beliefs about Covid-19.
  4. There is a positive relationship between using messenger services (Facebook Messenger and WhatsApp) for news and holding conspiracy beliefs about Covid-19.

The researchers conducted a two-wave panel survey. Both waves measured core independent variables (use of social media platforms and messenger services) and controls. After the outbreak of Covid, wave two measured the dependent variables — six Covid-19 statements, three were related to conspiracy theories about the origin of Covid-19.

Depending on their affordances, platforms influence conspiracy theory beliefs (CTB) differently. More precisely, Twitter will have a negative effect on CTB, while Facebook, YouTube, and messenger services (WhatsApp and Messenger) will all have positive effects on conspiracy theory beliefs.

The analysis shows the relationship between social media platforms and messenger services with conspiracy theories. The platforms’ interactive and networking features supply active environments to spread conspiracy theories, and some social platforms offer more effective settings than others. The findings show that usage on Twitter is less effective and negatively affects conspiracy theory beliefs, reducing it by 3% on the conspiracy scale. In contrast, Facebook, YouTube, Messenger, and WhatsApp positively increase conspiracy theories, between 3% and 5%.

The takeaway

Social platforms offer different architectural features and consumer relationship designs: symmetrical and asymmetrical.  Follower designs affect how consumers interact with conspiracy theories and intensify their beliefs. Understanding the spread of conspiracy theories and how it differs across social media platforms and messenger services offers insight into strategies to combat this situation.

Industry-Research

Social platforms fail to protect users from hate

Many question the boundaries of social media discourse. Is free speech protected on platforms? And what are the limits and liabilities? As assured in the First Amendment, private companies like Facebook, Instagram, YouTube, Twitter, and TikTok have no legal obligation to protect an individual’s right to free speech.

They are, however, entitled to moderate content on their sites is also guaranteed by the First Amendment. Each social platforms sets its own community guidelines. However, all five of these platforms have rules that prohibit hate speech against individuals or groups based on protected characteristics including ethnicity, nationality, race, or religion.

And just 10 months ago, Facebook updated its guidelines to prohibit any content that denies or distorts the Holocaust. Mark Zuckerberg reflected on this change, “My own thinking has evolved as I’ve seen data showing an increase in antisemitic violence, as have our wider policies on hate speech.” In fact, the Anti-Defamation League reports that U.S. antisemitic incidents were at a historic high in 2020.

Lax enforcement

Yet despite stated guidelines and goals, the question remains: How effective is social media in protecting their users from online hate and disinformation on their platforms? Unfortunately, the answer is not good.

The Center for Countering Digital Hate’s (CCDH) works with practitioners in diverse fields to develop strategies that strengthen tolerance and democracy, and counter-strategies to new forms of hate and misinformation. It’s new report, Failure to Protect, finds that social platforms fail to act on 84% of reported anti-Jewish hate content. All five social platforms prohibit common forms of antisemitic content defined as hateful conspiracy theories, genocide denial, dehumanization and hate symbols.

CCDH recorded and reported 714 antisemitic posts seen up to 7.3 million times.

The CCDH identified and reported 714 posts, between May and June of 2020, containing antisemitic content on Facebook, Instagram, Twitter, YouTube and TikTok. They used the platforms’ own reporting tools to measure the effectiveness of each companies moderating process. In aggregate, the 714 posts reached a total of 7.3 million impressions.

Importantly, of the 714 posts, only 16% were acted upon. Seven percent of the posts were removed while 8.8% of the accounts were remove, resulting in the removal of the antisemitic posts. However, 0.1% of the posts were labeled as false content but remain on the platforms.

Platforms failed to act on 84% of reports of anti-Jewish hate.

Conspiracy theories

Further analysis of the 714 posts identified that more than two-thirds — or 477 of them — contained anti-Jewish conspiracy theories. The platforms only acted on 11.5% of these posts, significantly lower than the 16% of the full sample. Interestingly, the CCDH concludes that social platforms are far less responsive to antisemitic conspiracy theories than other, more common forms of antisemitic content.

Extremist content

In addition, 277 posts or 39% of the sample were associated with extremist anti-Jewish hate content. This includes holocaust denial or minimization, references to inciting explicit violence towards Jewish people, racist caricatures of Jewish people, references to the blood libel and Nazi, neo-Nazi, or white supremacist content. Social platforms acted on 25% of these posts. With additional analysis, the CCDH findings show that the platforms ignore at least 80% of posts that dismiss the Holocaust and overlook 62% of posts that call for violence against Jews.

Hashtags add to the problem

Hashtags also allow for the proliferation of antisemitic content because they direct users to more content on a topic. But platforms have little incentive to restrict their use because they help fuel the social ecosystem. More content consumption generates more traffic and the serving of more ads. In other words, hashtags generate revenue. The 447 posts identified using antisemitic hashtags generated 3.3 million impressions across Instagram, TikTok, and Twitter.

Respond responsibly

The CCDH research clearly demonstrates the role social platforms play in increasing the visibility of hate and misinformation. Social media has no liability for the content posted on their platforms. Section 230 of the Communications Decency Act of 1996 provides immunity to platforms for third-party content. Unfortunately, hate drives traffic and social platforms profit from it.

The CCDH recommends how social platforms can correct their failings to act on anti-Jewish postings:

  1. Remove user groups dedicated to antisemitism.
  2. Ban antisemitic hashtags.
  3. Close accounts which send racist abuse to Jewish people.
  4. Hire, train, and support the moderators to effectively remove dangerous anti-Jewish hate.
  5. Legislators and regulators should ensure platforms are liable in the same way as any other person or corporation for the harms they create.

Despite on-going and valuable debates on regulation, legislation will not be an immediate solution. However, the other CCDH recommendations are clearly within the platforms’ control and should be an urgent priority.

Advertising | Industry-Research

Discriminatory optimization: Social algorithms conflict with marketing plans

Research findings show that ad delivery optimization can often skew the exposed audience by gender or race. Specifically, research found that Facebook algorithms used to optimize a target audience discriminated in its delivery of job advertisements. New research, Auditing for Discrimination in Algorithms Delivering Job Ads, expands on this work to present an auditing methodology for gender bias in audience qualifications.

The auditing methodology analyzes the delivery skew of the algorithmic optimization. Further, it detects if the skew is due to ad targeting qualifications or the platforms optimization learning process. Importantly, if offers insight into social platforms’ black box algorithmic systems.

Methodology

Proprietary ad platforms, algorithms, and data make it difficult to audit Facebook and LinkedIn. To overcome this, researchers created an external auditing process. Facebook’s and LinkedIn’s custom audience feature allows advertisers to build audience targets on the platforms. This offers the ability to infer the gender of the ad recipients for platforms that do not provide post-delivery statistics.

The authors, Basileal Imana, Aleksandra Korolova, and John Heidemann, registered as advertisers on both Facebook and LinkedIn. They ran ads for real employment opportunities on both platforms and audited the results.

Audit criteria

To test for a bias in the algorithmic choices of the platforms, a set of ads run to compare audience delivery. Each set of ads must be similar in audience requirements. This permits the audience delivery to equally qualify (or not) audience members to each of the ads with a consistent assessment.

The set of ads must also exhibit a true bias in the real-world. A comparison of the delivered audience with an actual audience bias offers an important point of comparison. Real-life bias and non-bias factors are constantly informing the algorithms in a platform’s continuous learning process. Therefore, if there is a significant skew in the platform’s audience delivery, it likely stems from the optimization process. In other words, the system overrides the requested audience requirements to supply its preferred optimized audience.

Test ads

The researcher’s setup three tests to compare audience delivery. They include pairs of ads for delivery drivers, sales associates, and software engineers. The ads ran on both LinkedIn and Facebook. Campaign goals were exactly the same and included conversion (clicks), to maximize the number of job applicants and reach, to increase the audience exposure.

The first test included ads for delivery drivers for Domino’s and Instacart, both with identical job requirements. Note that, in practice, Domino’s has a higher male composition of drivers while Instacart has a higher female composition.

Audit results

The test results show evidence of a statistically significant gender skew in audience delivery on Facebook but not on LinkedIn. Facebook’s audience delivery is in line with the actual male skew of Domino’s, even though the campaign requested a gender-balanced audience. Facebook’s algorithmic optimization trained on real-life data adjusted the campaign’s audience delivery.

This unique research offers a new auditing methodology to detect bias audience delivery on social platforms. It offers insight into how ad platform algorithms adjust for platform objectives and override the advertiser’s requirements.

Further, testing on Facebook and LinkedIn demonstrates that the methodology is applicable to multiple platforms and that not all social platforms produce biased results. Importantly, this research offers an auditing solution to protect marketers from unwanted biases baked into social platforms black box algorithmic systems.

Featured Post | Policy

Australia’s new media bargaining code: What’s really up down under

“Don’t worry about the world coming to an end today. It is already tomorrow in Australia.”

—Charles M. Schultz

For those focused on where the future of the internet media economy is headed, all eyes turned to Australia in recent weeks. And, despite a last-minute PR spin campaign filled with half-truths and outright deception by pundits around the world vying to influence the debate, the end result is a new law, the News Media and Digital Platforms Mandatory Bargaining Code, which foreshadows the future for Google and Facebook.

We’ve had enough hot takes. It’s time to kill off, once and for all, the disinformation, misinformation, and talking points of the infamous duopoly, which I’ll try to do here by busting 10 myths. (Happy to talk through any of these further. Just reach out: publicly or privately.)

Myth busting

1. The bargaining code resulted from an arbitrary process.

This couldn’t be further from the truth. The Australian government undertook a thorough, multi-year process to establish this new law. Importantly, its competition regulator (ACCC) spent nearly two years investigating the dominance of Google and Facebook. The result was a 600+ page report that clearly demonstrates the imbalanced bargaining power held by the duopoly. At the same time, the Australian government – with support from all political parties – formulated a public policy decision about how to better fund journalism. The only assumption made was that the press is critically important to democracy. This should not be a controversial assumption. 

2. The inventor of the web has called this a “link tax” that will break the internet.

Yes, Tim Berners-Lee wrote a letter rightly expressing his concern that if it was possible to require payment for links throughout the web, it could break the internet. In the letter, he often hedged and clearly wasn’t focused on the specifics of the law, which does not require payment for links. We’ve seen this “link tax” talking point high on Google’s list in the past. And it’s a galvanizing force for defenders of the open web – as it should be. The law does mention linking but only in the context of describing what a digital platform does by publishing, curating, and linking to the news. It’s narrowly focused on the two platforms and in no way does it suggest a platform should be required to compensate for its links to news outlets.

3. Facebook won key concessions at the final hour.

The concessions for Facebook were, in fact, relatively minor. When Facebook pulled news off Australian users’ feeds, their goal was to trigger global outrage, shake up the press cycles, and turn the globe against Australia. Then, by throwing its PR might behind some elegant spinning about a great compromise, Facebook saved face. That’s all they did.

The final concessions included the addition of a couple windows of time (measured in months) in which Facebook will lobby and protest about having to pay for news. The “concessions” also included two changes that clarify the mechanics of the code.

4. This law is a gift to Murdoch and hurts everyone else.

Yes, News Limited has a lot of influence in Australia as its leading news company. In fact, as the ACCC Chairman noted, 80-90% of the journalists in Australia work for one of three companies (News, Nine, ABC). However, the idea that Google or Facebook would negotiate with these three companies and hang the other 10% of the market out to dry seems very unlikely considering the modest amount of additional funds it will take to round out the rest of the industry.

Having spent a significant amount of time on Australia’s 600+ page report, I would suggest that the law is much more clearly in the camp of increasing bargaining power for all journalism. It’s hard to argue that any news publisher with more than $150k in revenue per year isn’t better off with this law in place. Moreover, the law also allows for publishers to collectively bargain if they prefer. That does seem likely if they’re not getting what they need from Facebook and Google.

5. News Corp’s global deal with Google will result in settlements of antitrust lawsuits.

This anti-antitrust argument is the silliest thing I’ve heard. There is no greater fallacy in digital media right now than attributing the global antitrust scrutiny on Google and Facebook to one or even just a few parties. The antitrust lawsuits currently filed have the weight of the U.S. government, in 49 out of 50 states, and both parties in Congress.

The cases are robust, particularly the Texas-led advertising tech case against Google (which mirrors some of the work of the ACCC), Congress. Another is from the CMA, which is the UK’s comparable regulator. It also alleges a Section 1 charge of bid rigging between Facebook and Google. No market regulator walks away from these cases based on the whims of one complainant. The work in Australia has only added weight to these cases.

6. Publishers in Europe should be celebrating.

Globally, there is a lot of positive reaction to the work done in Australia. However, it’s also notable that the European market has been working for even longer on better funding professional content. In successfully passing an updated copyright directive, they’ve taken an approach that establishes additional rights for publishers through a publisher’s “neighboring right.”

Importantly, the European approach is not restricted to just news. It covers all content including snippets offered on Facebook and Google. France was first to bake this new right into law. Google responded by trying to avoid paying for anything that they’ve historically taken for free.

They’ve even invented a new product offering, Google News Showcase, to bury their payments and bundle in all rights needed. This minimizes any increased bargaining power for publishers, which has caused even more scrutiny. This opaque bundling of payment for rights by Google and Facebook keeps popping up wherever they face regulatory threats. If payment for snippets isn’t clearly delineated, and the financial terms aren’t transformative, the EU is likely to view Australia’s new law as a missed opportunity.  

7. Government will set an arbitrary price for platforms to pay for news content.

The reality is that Australia has come up with a solution that uses market forces by requiring negotiated deals with publishers ahead of a mandatory bargaining code or an arbitration process. It uses a clever “final offer” process (also known as “baseball arbitration”) to finalize deal terms. In both cases, the government recognizes its weaknesses in over regulating a fast-growing digital marketplace. Instead, it leverages its antitrust enforcement to create a carrot and then a stick to get companies benefiting from a gross imbalance in bargaining power to the table to properly and quickly negotiate.

8. A straight platform tax would be a better solution.

The simple problem with a straight tax is all content would need to be “treated equally.” A click on Breitbart would have the same value as a click on The Wall Street Journal. The government would then divvy up a pot of money between everyone. This creates all sorts of uncomfortable government leverage over news. And one can only imagine how they would choose to split the loot. Think about the market incentives if they divided it up based on monthly uniques or page views. Better to push negotiations back into the market where intangibles such as brand, heritage, trust, consumer perception, and scoops have significant value.

9.This is unique to Australia and won’t translate to other countries.

Every lawmaker in Canada, Europe, the U.K., and U.S. who is focused on these issues will draft off Australia. Arguably, this was the biggest concern for Google and Facebook. They hoped to limit discussion to an island on the other side of the world. Our global market no longer works this way. Everyone learns from each other. Despite Facebook and Google’s ability to leverage their global dominance to protect their fortresses through trade deals, lobbying, and ducking lawmakers, the whole world is catching up to them.

Also, there are major allies in these fights to support the free and plural press. Microsoft, one of the few companies larger than Google or Facebook, has aligned with publishers on the new policies in Australia and Europe. (Forgive me, as Microsoft’s support evokes the classic “That’s not a knife” scene in Crocodile Dundee.)

10. Facebook and Google have pledged $1 billion each to news publishers so we should be happy.

Together, these two companies will easily surpass $250 Billion in global advertising revenues in 2021 without even participating in China. As of now, they’ve pledged $1 billion each towards journalism over three years. Thus, Google and Facebook are pledging barely 0.2% of their global advertising revenues towards journalism. Facebook’s protesting of payments was evidence in itself for Representative Cicilline to state that the company “is no longer compatible with democracy.” (And I tip my hat to the publisher that flatly stated that Facebook’s offer was not enough.)

These are two globally-scrutinized companies which pride themselves on moonshots. Yet they have failed to properly address how their algorithms help spread misinformation, disinformation. This has led to genocide in Myanmar, an insurrection on our Capitol, and health misinformation causing untold illness and death worldwide … to name just a few “unintended consequences.”

The future is now

The simple fact is that Facebook prefers to pay into journalism no more than it does for fake news from Macedonia, while continuing to grow its nearly $100 billion per year business of surveilling and microtargeting citizens with ads against the cheapest engagement available. They’ve devalued context. They’ve devalued facts. And they’ve devalued journalism for profits. In Australia, we see democracy fighting back.

Australia’s law has been endorsed by all major political parties in a representative democracy as a means to better fund journalism. Importantly, though this was rarely discussed, the code has a one-year review period to see how it’s working. If you listened too closely to American pundits the last few weeks, you would have thought this was the end of the open Internet – hypocrisy considering the closed platforms of those who shaped it.

The law prevailed. The world didn’t end.  In fact, it’s already tomorrow in Australia. They are ahead on this one, and there is a lot we can learn from it.

Industry-Research

Consumers of news on social media know that it is often inaccurate

Social media continues to grapple with the spread of misinformation on their platforms. And consumers know this. Regardless, they continue to use social media as a primary news source. According to the most recent Pew Research Center survey, more than half of U.S. adults (53%) report that they get their news from social media “often” or “sometimes.” The survey was taken by nearly 10,000 U.S. adults.

News resource

Facebook ranks highest (36%) as the number one news source consumers use regularly among 11 social platforms. YouTube ranks second at 24% and Twitter ranks third with 15% of adults regularly getting their news there. Fewer consumers say they get their news regularly on Instagram (11%), Reddit (6%), Snapchat (4%), LinkedIn (4%), TikTok (3%), WhatsApp (3%), Tumblr (1%), and Twitch (1%).

Accuracy

Interestingly, despite the fact that they often find their news on social media, consumers question the accuracy of the news they get on these platforms. Approximately six in 10 consumers (59%) say that they expect the news on social platforms to be largely inaccurate. Unfortunately, the data shows little change over the last three years. Even after two congressional hearings, there’s still an abundant amount of vaccine, Covid-19, and the 2020 presidential election misinformation on social media.

Social media does little to help consumers interpret the news. In fact, less than one-third (29%) of consumers believe the information they received on social platforms helps their understanding of the news. Further, 23% believe the news on social media leaves them more confused and 47% report that it doesn’t make much of a difference.

More women than men (63% vs. 35% and 60% vs. 35%, respectively) use social media to access their news. However, Reddit has a distinctly different demographic. Among its regular news consumers, two-thirds are men compared to women (67% vs. 29%).

Combating misinformation

Consumers use social media as an easy and accessible path to news and information. However, this Pew study clearly shows consumer are aware of misinformation on social media. Increased awareness is a good thing and an important step to expose and defuse misinformation.

Social platforms continue to try to combat misinformation with fact-checkers and other programs. Twitter launched a new program, “Birdwatch,” which allows Twitter users to comment and provide context on tweets that they believe are misleading or false. Unfortunately, none of these programs are winning the fight against misinformation. A recent investigation of Facebook found 430 pages with 45 million followers monetizing misinformation with Facebook tools. Clearly, more needs to be done to stop the dissemination and monetization of misinformation on social platforms.

Featured Post | Innovation | Perspectives

Trends, media models and platform regulation take center stage at the 2021 DCN Next: Summit

Held virtually and expanded to five days, the 2021 edition of the member’s-only DCN Next:summit (February 1-5) was certainly unlike any that came before. Fittingly, CEO Jason Kint kicked things off by reflecting on all that has changed over the past year and, perhaps more importantly, what has not.

“Publishers have been covering three of the biggest stories of our generation, all intersecting at the same time,” he said. “Your ability to stay true to your brands and to the public trust, despite personal and professional obstacles, has been remarkable.”

Amid all of this, Kint reminded attendees that the industry will need to keep its priorities straight to fuel a stronger digital media marketplace. Indeed, a broad theme of the event was the many ways publishers are adapting to shifts accelerated by the pandemic by deepening their direct relationships with audiences.

Platform power plays

Constellation Research founder and chairman Ray Wang expanded on that topic in the opening session, an interview by BBC correspondent Larry Madowo. Noting increased competition from outside the industry, Wang called for greater cooperation among media companies.

“What we have is a fracturing in the marketplace, which is making it very hard to compete with the digital giants,” he said. “In order to succeed, you have to band together.”

Sara Fischer in conversation with Mathias Döpfner

Axel Springer CEO Mathias Döpfner told Axios media reporter Sara Fischer that the “immensely powerful position” of tech platforms will need to be addressed by regulators. At the same time, he shared an optimistic outlook for the future of journalism. Unlike the print-centric business he took over 20 years ago, digital journalism carries lower costs, he said, allowing media companies to invest more heavily in editorial.

“You have no deadline. You have unlimited space,” Döpfner said. “And you can combine all aesthetic forms of journalism. It can be video, it can be audio, it can be text, it can be all combined. I think we are still in the early days of digital journalism and its creative potential.”

Monopolies and media models

Döpfner added that there’s a future for both subscription- and ad-supported journalism on the web, and that many organizations will continue with a mix of both. The future of advertising, however, depends on the role of platforms.

On the contrary, NYU marketing professor Scott Galloway said the key to survival for media companies will be subscriptions. He said that giving content away for free to “innovators and algorithms” was “the biggest mistake journalism ever made.”

Interviewed by Henry Blodget, the CEO of Axel Springer-owned Insider Inc., Galloway added that regulators should further address platforms’ data collection capabilities to mitigate their harmful effects.

POLITICO antitrust reporter Leah Nylen and Yale economist Fiona Scott Morton then explored potential regulatory remedies to the anti-competitive practices of tech companies. Scott Morton encouraged media companies to help educate regulators on the impact of “dominant advertising intermediaries,” such as Google.

“These markets for digital advertising are not something that most people understand,” she said. “It requires effort on the part of the affected parties to help move the conversation forward and push regulators in a direction that’s good.”

The pivot to paid

Meredith Kopit Levien in conversation with Peter Kafka

The subscription economy took center stage on Friday, when Recode senior correspondent Peter Kafka interviewed newly promoted New York Times CEO Meredith Kopit Levien. Pushing back on the notion that the Times was becoming too dominant a player, Kopit Levien suggested that the organization is helping to create a market for paid journalism.

“There’s plenty of room for other digital journalism outlets to survive and thrive,” she said.

“We’re still in the early days of the pay model. It wasn’t that long ago that everybody said things like ‘digital news wants to be free.’ Some of our journalistic competitors are having great years for subscriptions. We look at all of that as making a market.”

To build on the 2.3 million digital subscriptions the Times sold in 2020, Kopit Levien said the outlet will be investing in covering live and developing news. Additionally, she suggested that publishers should work to reduce their dependence on third-party data to help create better digital experiences for subscribers.

Meeting audiences whenever, wherever

CNN chief media correspondent Brian Stelter sat with CBS News president Susan Zirinsky for a discussion on how the pandemic has accelerated shifts in the TV news business. Gone are the days of holding major scoops or interviews for primetime, Zirinsky said. Even broadcast news must adapt to a 24/7, cross-platform model.

“We want to give people facts,” Zirinsky said. “We want to share information. This is really what it’s about: being on every platform that is available, taking our unique content and putting it in as many places as a consumer is.”

Peter Kafka in conversation with Jenna Weiss-Berman and Lydia Polgreen

One of those rising platforms, audio, was the topic of conversation between Gimlet Media head of content Lydia Polgreen, Pineapple Street Studios co-founder Jenna Weiss-Berman, and Recode’s Kafka.

While advertising remains a lucrative source of revenue, Polgreen said the medium needs some advancement in terms of measurement and audience-based selling, similar to other formats. Weiss-Berman added that the mechanisms for connecting ad buyers with content creators need development. Both agreed that there is still tremendous room for growth. The next big challenge will be reaching people who don’t currently listen to podcasts.

“If you look at the research, podcast listening has tripled since 2014, in terms of share of time, but only from 2% to 6%,” Polgreen said. “In a world where audio is completely on-demand, the possibilities are pretty endless.”

The future of media and journalism

Elsewhere on the program, Snap CMO Kenny Mitchell and Clubhouse CEO Paul Davison each explored growth strategies for their respective platforms. They also touched on the importance of creator relationships and the intersection of content and community.

Julia Angwin, editor-in-chief and founder of The Markup, took attendees behind the scenes of The Atlantic’s highly successful COVID tracking project. Staff writer Alexis Madrigal, who co-founded the project, reflected on the many challenges involved in merging numerous disparate sources of data to meet a critical need for information in the early months of the pandemic.

Angwin noted that the project exemplifies the tangible benefits that journalistic endeavors can provide to the public, particularly when providing information that might be “politically inconvenient.”

Web Smith, Jarrod Dicker, and Stacy-Marie Ishmael

On the final day of the Summit, Stacy-Marie Ishmael, editorial director at The Texas Tribune, led a lively conversation with 2PM Inc. founder Web Smith and The Washington Post’s VP, commercial, Jarrod Dicker, on the future of media. In line with the trends, the discussion largely focused on the rise of independent creators.

“Twitter and other platforms have enabled individual people to build their own reputation. It’s created an entirely new landscape,” Dicker said. “Creators can see what their individual value is. I think that’s a change in the discourse.”

New year, same values

In closing, Kint said that, despite adapting well to a virtual event, he hoped to see everyone back in Miami for the 2022 DCN Next: Summit. In the interim, he advised those in attendance to focus on three key things: strengthening bonds with audiences and partners, understanding the core needs of both, and emphasizing agility in response to change.

“Every member of DCN has a direct and trusted relationship with their users and advertisers,” he said. “Our Summit is the one place where, in the comfort of a closed-door environment, surrounded by others who share our values, we can also share our successes and vulnerabilities.”

Featured Post | Perspectives | Policy

Why healthy competition would heal our big tech problems

Public policy debates over consumer privacy and platform liability will feature prominently in 2021. Some are even hopeful that policymakers can reach bipartisan agreement on solutions. These are two important issues that I want to explore. However, I wonder if they aren’t the byproduct of a bigger problem.

Consumer privacy: A policy patchwork

One could argue that the digital advertising industry has been “regulated” (even if enforcement was less than robust) since 2010 when the industry’s self-regulation group, the Digital Advertising Alliance (DAA), rolled out its AdChoices program. In 2018, Europe began enforcing the General Data Protection Regulation (GDPR). In 2020, the California Consumer Protection Act (CCPA) came online followed by the November passage of the GDPR-like California Privacy Rights Act (CPRA).

Against this alphabet soup of patchwork regulation, we may be reaching a tipping point. For one thing, more states are expected to pass consumer privacy laws in 2021. Even with pandemic-altered legislative calendars, 16 states nearly passed laws in 2020.

Additionally, Congress has held countless hearings over the last two years to investigate big tech’s massive data collection operations. Those hearings are sometimes painful to watch, but they are serving to educate members of Congress, who appear to be much more knowledgeable now than they were a few years ago. (Remember when one of them asked Mark Zuckerberg how Facebook makes money? Oy.)

As further evidence of an increasingly savvy Congress, there is a bipartisan group of Senators quietly negotiating to craft a national consumer privacy framework. From what I’ve seen and heard, their approach is fairly solid. With slim Democratic majorities in both houses of Congress, this kind of bipartisan approach is the only way that any meaningful privacy law can get passed. However, the deck may be stacked against them. It is difficult to move major legislation with slim majorities in the House and Senate because the margin for error is very small.

All that said, the California laws (CCPA and eventually CPRA) are likely to serve as the de facto national standard. Many companies already apply those laws nationwide, not just for California residents. Besides which, most of the big tech giants are based in California. While the CCPA was a strong first law designed to give consumers more control over how their data is collected and used, CPRA is directly targeted at curbing Google and Facebook’s massive data collection and profiling operations.

GDPR has a similar focus. However, Google and Facebook have employed creative compliance strategies that have allowed them to temporarily evade a direct hit to their businesses. The big question is whether European and California regulators can force big tech companies into finally complying with the spirit of these consumer privacy laws. Fines are fine. But the laws were actually intended to empower and protect consumers.

Section 230: A Tale of two parties

Often referred to as “The 26 Words That Created The Internet,” Section 230 became a target of both political parties in 2020. Prominent Republicans and Democrats — including each party’s Presidential nominee — have called for the elimination or massive overhaul of Section 230. And yet Congress is not all that close to resolving anything.

The problem is that each party’s concerns lead them to propose different solutions. Democrats and Republicans both agree that big tech platforms have too much market power. Hence, the flurry of antitrust lawsuits filed by a Republican Department of Justice (and likely to be carried forward by a Democratic Department of Justice) and a bipartisan flotilla of state attorneys general.

With regard to Section 230, however, Democrats criticize tech platforms for not taking action quickly enough to combat disinformation, harassment, and demagoguery. Republicans, on the other hand, allege that big tech companies use the legal shield of Section 230 to suppress conservative speech. Essentially, Democrats want tech companies to do more while Republicans want tech companies to do less. These fundamentally different viewpoints are likely to make it difficult for Congress to agree on any big changes to Section 230.

Big picture, bigger issue

What’s interesting to me is that the public policy debates around consumer privacy and Section 230 are largely driven by dominance and anticompetitive behavior of big tech companies. I wonder if we would even be having these debates if Google and Facebook faced meaningful competition.

The aforementioned alphabet soup of consumer privacy regulations was developed to address consumer concerns about the ubiquitous and non-transparent collection of consumer data for use in behaviorally targeted ads. The two most dominant players in the digital ad industry, Google and Facebook, have built massive ad targeting businesses (basically the digital equivalent of junk mail), which are fueled by the collection of consumer data across the web and our lives. The duopoly, as we have called Google and Facebook for years now, accounts for 70 to 80% of the growth in the digital advertising marketplace. Much of this advertising is delivered on their own properties regardless of where they mined the data.

With regard to Section 230, the original intent of the law was to incentivize companies for making “good faith” actions to clean up their services. However, without meaningful competition among digital platforms, those companies are merely incentivized to protect themselves against legal action as opposed to competing for consumer loyalty.

Anticompetitive by design

Imagine a world where Facebook and Instagram were separate companies competing for consumers. I think they would be vying to prove which company would be the best at snuffing out disinformation, stamping out illegal activity, and generally providing the most trustworthy service.

Significantly, when Facebook was first launched, it touted a super strong set of privacy protections and controls to differentiate from the established market players at the time. But not now. The “like” button was originally designed as a user signal to show content interests. It has become an opaque means to track people’s movement around the web. Facebook’s business model is so reliant on tracking users it ran a national ad campaign last month to publicly pressure Apple to blink on its plan to restrict the use of its advertising identifier (IDFA). And let’s not forget that Facebook only reluctantly and belatedly de-platforms hate groups and removes disinformation.

If there was meaningful competition, big tech platforms would behave very differently within the industry and for consumers. The latest bit of evidence that Google and Facebook agreed to cooperate rather than compete with each other was particularly appalling. The two dominant players in digital advertising decided to carve up the market for themselves while icing out everyone else. The fact that the agreement exists at all is quite amazing. Perhaps more amazing is that these two companies had enough chutzpah to even engage in the negotiation in the first place. In many ways merely confirmed what many industry insiders already suspected. It’s the Duopoly’s world and we’re just living in it.

While we engage in meaningful and important debates about consumer privacy and the responsibilities of companies in a digitally-dominated world, let’s not lose sight of the fact that the competitive landscape is heavily tilted in favor of the big tech companies. The antitrust lawsuits and regulatory scrutiny faced by Google and Facebook are hugely important for restoring a heathy dose of competition, which could alleviate some of the downstream public policy concerns.

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